Can an Angry Chickz developer offer or sell franchises to third parties?
Angry_Chickz Franchise · 2025 FDDAnswer from 2025 FDD Document
7.2 No Subfranchising by Developer.
- 7.2.1 Developer shall not offer, sell, or negotiate the sale of franchises to any third party, either in Developer's own name or in the name and/or on behalf of Company, or otherwise subfranchise, subcontract, sublicense, share, divide or partition this Agreement or any Franchise Agreement executed pursuant hereto, and nothing in this Agreement will be construed as granting Developer the right to do so. Developer shall not execute any Franchise Agreement with Company, or construct or equip any Restaurant with a view to offering or assigning such Franchise Agreement or Restaurant to any third party.
- 7.2.2 Notwithstanding Section 7.2.1, Developer may, with Company's prior written consent, execute and contemporaneously assign a Franchise Agreement executed pursuant hereto to a separate Entity controlled by Developer (each a "Subsidiary"); provided and on condition that:
- (a) Upon Company's request, Developer has delivered to Company a true, correct and complete copy of the Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, partnership agreement, and other organizational documents, and Company has accepted the same;
- (b) The Subsidiary's articles of incorporation or articles of organization, bylaws, operating agreement, and partnership agreement, as applicable, shall provide that its activities are confined exclusively to operating Restaurant;
- (c) Developer, directly owns and controls not less than 100% of the Equity and voting rights of the Subsidiary;
- (d) the Subsidiary is in good standing in its jurisdiction of organization and each other jurisdiction where the conduct of its business or the operation of its properties requires it to be so qualified;
Source: Item 23 — RECEIPTS (FDD pages 54–260)
What This Means (2025 FDD)
According to the 2025 Angry Chickz Franchise Disclosure Document, developers are generally prohibited from offering or selling franchises to third parties. Specifically, the Area Development Agreement does not grant developers the right to subfranchise, subcontract, sublicense, share, divide, or partition the agreement. This means a developer cannot sell franchises to other individuals or entities.
However, there is a notable exception. With Angry Chickz's prior written consent, a developer can assign a Franchise Agreement to a separate entity, referred to as a "Subsidiary," that the developer controls. For this to be permissible, the developer must provide Angry Chickz with the Subsidiary's organizational documents (articles of incorporation, bylaws, etc.) for approval.
Furthermore, the Subsidiary's activities must be limited exclusively to operating an Angry Chickz restaurant. The developer must directly own and control at least 100% of the equity and voting rights of the Subsidiary, and the Subsidiary must be in good standing in its jurisdiction. This exception allows a developer to operate franchises through different legal entities they control, but it does not allow them to sell franchises to completely independent third parties.